January 2009

January 12, 2009

I've already whined about this lousy brand-new computer and its inability to take and hold a proper charge. It was plugged in all night, and has been plugged in again here at the GM stand for an hour - and it is still sitting at just 12 percent capacity.

And it just occurred to me - this thing is powered by a lithium-ion battery, exactly the same technology (albeit on a smaller scale) that all the car companies seem to think will be powering the car of the future.

Based on my computer experience this week, I'd say - not likely, mate.

I've already used the line about liars, damned liars and battery engineers.

GM has just announced that the battery supplier for their Chevrolet Volt will be LG, the Korean conglomerate. I hope they get it figured out.

Yesterday, Bob Lutz, GM vice-president, recounted the story of how he was an 'early adopter', buying a battery-powered scooter. On one ride, he found himself ten miles from home - with a dead battery. A phone call to a friend brought a gigantic V8-powered pick-up truck to haul the thing back home.

A couple of years ago, you wouldn't have given the marque much of a chance of success.

Their product mainstay was the Jurassic Town Car. They tried - twice - to throw an up-scale pick-up truck off buildings onto unsuspecting buyers.

Meanwhile, arch-rival Cadillac was going from strength to strength.

Recently though, the largish MKS sedan has been surprising critics, customers and most importantly competitors with its handsome looks, good fit and finish, and overall competence.

When the Direct Injection turbocharged Ecoboost V6 is added later this year - 355 horsepower, more than most competitors' V8 offerings with up to ten percent better fuel economy - it should do really well.

Today Lincoln unveiled a new production crossover, the MKT, and a cute little Concept C, based on Ford's new Fiesta platform.

Yes, meeting old friends on both sides of the journalist/corporate wall called for some name-badge staring, to see if they were still employed at all, let alone by whoever they had been working for last week.

And there was a lot less glitz than before. Fewer Kodo drummers. Fewer fancy video presentations.

And fewer Hospitality Suites after the show - the budget cuts are real, my friends.

What was most interesting though was that most car companies seemed to have a real product story to tell.

Everyone agrees that the three secrets to success in the car game are, product, product and product.

Environmental stuff is taking centre stage, despite the fact that gasoline is once again free here in the US, and sales of small cars have already started to nose-dive.

But (almost) everyone thinks this will be temporary, and sooner or later, the customer will demand greater efficiency.

When/if they do, it behooves the manufacturers to be ready for them.

That said, there is still plenty of interest in high-performance cars, the stuff of automotive dreams.

That's one of the attractions of the Detroit Auto Show for journalists - it's hard to get this kind of access at other international auto shows.

Lutz and Ford agreed on quite a few things, actually. With respect to the recent visit to Washington by the CEOs of the three Detroit-based auto makers (Rick Wagoner of GM, Alan Mullaly of Ford, Robert Nardelli of Chrysler) both senior executives were quite taken aback by the reception they received.

Both mentioned that politicians, or even senior executives of other corporations that car company people talk to for advice all the time, don't seem to understand a few things about the car business.

In no particular order, the politicians in particular seem to be playing from a really old playbook. They keep thinking the domestics still trail the imports on things like quality and crash safety, when virtually every third-party analysis suggests otherwise.

They seem to think that the car makers weren't building the products the public wanted, when two years ago what the public wanted was precisely the big trucks and SUVs the domestic car makers seem uniquely capable of building and which of course were immensely profitable too.

They seem to think the car makers can switch products at will, when in fact every new vehicle is the result of hundreds of thousands of individual decisions taken over a period of 18 to 30 months which is the time needed to design and develop a new product.

They seem to think that all the car makers need to do is tell the public what to buy and they will meekly obey. As if. And some of those politicians are old enough to remember the Edsel.

Even senior executives from other industries are surprised once they get to know the car business a little how complex it is. Just managing the supply chain - trying to ensure the outside companies who are supplying everything from sheet steel and bolts to complete transmissions and tires get the stuff to the assembly plants just in time, on budget, and don't either go on strike or out of business in the interim - is a hugely complex deal.

And building the car is just the start - distribution, marketing, sales support, financing, parts and service - it is a tough, tough business.

And one that doesn't necessarily play by any rules. What works today might be obsolete by tomorrow.

It is also a business run by the heart. As Lutz said, the 'transportation' component of a car purchase could be perfectly handled by "a three year old Mitsubishi Gallant', to quote the example he used. It's the emotional component that drives the business, and that's much harder to get a handle on.

But that's also why it is such a fascinating business.

That's also why we will be back at the Detroit Show tomorrow, to try and keep pace with it all.

January 11, 2009

General Motors showed three near-production cars which should all hit production status in 2011 or shortly thereafter.

The Beat concept car from two years ago will become the Spark, a sub-compact which will consume less than 6 litres per 100 km.

The Orlando is a three-rows-of-seating crossover about the size of a Honda Civic. It
could also well be the precursor to the next Opel Zefira in Europe.

The Cadillac Converj - yes, it IS spelled wrong - is a gorgeous coupe that will share
technology with Chevrolet's Volt - electric power, with an on-board combustion engine to recharge the battery if, as and when needed.

This technology is becoming known as "range-extending", and is also featured in the Mercedes-Benz E-Cell Plus and a couple of concepts from Chrysler, about which, more in a subsequent blog.

All three new GMs promise to be useful players - as long as gasoline stays relatively expensive.

Bob Lutz, GM's product czar, said in an interview (soon to be posted here too), "It's a lot easier to plan products around the European gasoline price which ranges from $6 to $9 per gallon, than it is [in the US] where it varies from $1.50 to $4.00."

This is because even at its lowest price in Europe, gasoline pricing is a big factor in a car purchase. Only when it is at its peak in North America does it really enter the purchase decision.

This past summer when it was high here, Honda Civic sold like gangbusters in the US. Once the price retreated in the fall, Civic sales fell too.

With product planning cycles being what they are, no-one in the industry can really react fast enough to rapid changes in gasoline pricing. Companies headquartered in countries where gasoline is always high obviously have an advantage.

Still, GM seemed to be saying the right things, and focussing on the new products they have in the pipeline.

The press days at Detroit used to start Monday. Then somebody started Sunday.

Now Mercedes-Benz has showed three significant new models on Saturday evening.

The most important, commercially anyway, is the new E-Class. Borrowing styling cues
from both the smaller C-Class and larger S-Class, the new E has a more angular look, as planes and edges are replacing the worn soap-bar look that has dominated car design for two decades.

For us, the engine line-up will, initially anyway, be similar to what the car offers now - six- and eight-cylinder gasoline, six-cylinder turbo-Diesel. A new family of fours are offered in Europe; Mercedes North America officials were smilingly non-commital as to whether they would ever see our shores.

Mercedes also showed two of the three planned variants of Concept BlueZERO -
electric-drive cars. It looks like a face-lifted current B-Class, and shares that car's 'sandwich' floor construction - the electricity supply goes under the floor; the electric motor drives the front wheels. The E-Cell is powered by lithium-ion batteries made by Mercedes, the first car maker to get into that business; range is expected to be about 200 km. The F-Cell has fuel cell power for the motor; range should be about 400 km. E-Cell Plus adds an internal combustion engine to recharge the battery, like Chevy's Volt, extending the range to 600 km, with some 100 km possible from the battery alone.

The E-Cell cars are scheduled to be available in low volume some time this year.

On the other end of the Green continuum comes a special edition of the McLaren SLR

Roadster, dubbed SLR Stirling Moss, after the man who drove the original SLR to such fame. Stunning styling recalls that old SLR. Only 75 of these cars - the last SLR Roadsters that will be built - starting this June. Price is 750,000 Euros - currently, well over a million bucks CDN. The car isn't expected to be legal for Canada or the US, not that this means there isn't a lot of interest in it.

January 08, 2009

Anyone been noticing that many of my blogs start off with song lyrics?

I should start a contest to see if anyone can identify them.

What can I say - music is my life. "The Compleat Works on their Mid-Life Crisis Tour", live '60s and '70s rock 'n' roll, available for your next party...

I digress...

***

Anyway, it's the first week in January, and a car freak's fancy turns to thoughts of - Detroit?

Yep, as I say every year, is there any place you'd rather be in January than Detroit?

OK, just about any place else. At any time of year, actually.

But January means the North American International Auto Show, a.k.a. the Detroit Auto Show. And despite all the troubles the Detroit-based car makers have been going through recently, it remains the most important, if not necessarily the biggest, auto show on the planet.

More debuts happen here, even for International car makers, than anywhere else. We'll be highlighting them, both here on Wheels.ca starting next weekend as they happen, and in the print edition of Wheels the weekend following.

But like everything else 'Detroit' these days - except maybe the hated Swedish Dead Wings hockey team (my favourite team is whoever is playing Detroit) you have to wonder if the Detroit show's days at the top are numbered.

Already, Detroit is no longer the centre for car manufacturing, even in North America. Ontario now builds more cars than all of Michigan. I can't remember the last new car plant that was built in the Detroit area - they're all going south, literally as well as metaphorically.

As for the Show, several important car makers have chosen to give Detroit a pass this year, following the lead of Porsche which bailed a couple of years ago. There have been reports of a hissy fit between the Stuttgart sports car (and overweight overpriced SUV) maker and the show organizers, although Porsche said it was because it doesn't sell many cars in the Detroit area, so why spend the money promoting them there?

The point is, Detroit is - or has been - mainly significant because of the media attention it draws, not for the punters who visit the show during the public days.

Does the fact that these car makers have decided that this coverage is no longer worth the money signal a sea change in automotive marketing?

With magazine ad spending trending downwards and large TV audiences increasingly difficult to capture due to specialty channels and the fabulous PVR which allows you to bypass commercials altogether, many companies are turning away from traditional car-flogging techniques, and turning to the Internet, including viral marketing, movie product placement, and sports or cultural sponsorships to get their message across.

Some industry insiders even wonder if the entire concept of a major auto show has passed its sell-by date.

Several major high-end manufacturers skipped the once-prestigious Earl's Court show in London England this past fall.

The Canadian division of one importer looked at the cost of renting display space at the relatively small and expensive Vancouver show a couple of years ago - not to mention taking their sales reps off dealership showroom floors to 'person' (can't say 'man" any more...) the display - and realized they could put $1,500 on the hood of every car (that's industry-speak for 'rebate'), it would cost them less, and they would move more iron.

Even the gigantic Toronto show, by far the biggest and most important in Canada, is facing some pull-outs this February.

As with everything else, time will tell.

Short-term, Wheels will be all over the Detroit show like a bad rash. As always, we will have by far the biggest media contingent of any automotive outlet anywhere. Yep, 'WAY more than any of the Detroit papers (American newspapers have yet to cotton on to the brilliance of the Wheels concept, even though we've been showing them the way for over 20 years). 'Way more than any of the American car rags, web sites, anybody.